Apr 12, 2018 - NBF Economics and Strategy (Data from Teranet-National Bank House Price Index) ... Number of months to se
April 12, 2018
Composite Index flat in March
Teranet-National Bank Composite HPI flat in March Without Vancouver, six drops over the last seven months
2.8
Teranet-National Bank Composite National HPI m/m growth: March: 0.0% Feb.: -0.1% Jan.: +0.3% y/y growth: March: +6.6% Feb.: +7.5% Jan.: +8.7% FACTS: The Teranet–National Bank Composite National House Price IndexTM was flat in March. Four of the 11 constituent metropolitan areas recorded increases in the month: Victoria (+1.0%), Vancouver (+0.5%), Winnipeg (+0.5%) and Quebec City (+0.1%). The index was stable in Toronto, and dropped in the six other areas covered: Montreal (-0.2%), Hamilton (-0.3%), Calgary (-0.4%), Ottawa-Gatineau (-0.7%), Halifax (-1.0%) and Edmonton (-1.3%). On a y/y basis, the Composite index rose 6.6%, the ninth softer reading in a row following the record gain of 14.2% last June, and the lowest since March 2016. Vancouver (+15.4%) and Victoria (+12.5%) lifted the national average, while the index annual growth was more moderate in other metropolitan areas: Halifax (+6.1%), Hamilton (+5.9%), Toronto (4.3%), Montreal (+4.3%), OttawaGatineau (+3.0%), Winnipeg (+2.9%), Calgary (+0.4%) and Edmonton (+0.2%).The index declined 0.4% in Quebec City. See charts on next page. OPINION: Without Vancouver, the Composite Index would have declined in March and in 5 of the 6 preceding months (top chart). Speaking of Vancouver, inferring from Real Estate Board of Greater Vancouver data, seasonally adjusted home sales have declined markedly over the last two months and the listings-to-sales ratio, while still in the sellers’ market territory, moved close to the balanced market boundary (middle chart). This should translate into moderate increases in Vancouver’s Index over the next few months. Apart from Vancouver and Victoria, March indices were below their recent peak in all regions, but the decline was the most obvious in Toronto (-7.3% since last July). This drop was likely triggered by Ontario’s implementation of the 15% NonResident Speculation Tax followed by stricter rules for qualification for a mortgage (B20) and a rise in mortgage rates. As a result, Toronto monthly seasonally adjusted home sales, which had averaged more than 9,000 units over the previous 24 months, fell to less than 7,000 units on average since last May (bottom chart). Following this change in home sales pace, Toronto home resale market turned from very tight to balanced. With the two most important Canadian markets now in balanced territory or nearing it, a soft landing is the most likely outcome for the Canadian residential market.
Marc Pinsonneault
%m/m
2.4 2.0 1.6 1.2 0.8 0.4
Composite
0.0 -0.4
Without Vancouver
-0.8 -1.2 -1.6 -2.0 2014
2015
2016
2017
2018
NBF Economics and Strategy (Data from Teranet-National Bank House Price Index)
Vancouver: Existing home resale market Active-listing-to-sale ratio, last observation: March 2018 20
Number of months to sell homes listed for sale, at current sales pace
18 16 14 12 10
Buyers’ market
8 6 4
Sellers’ market
2 0 2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
NBF Economics and Strategy, REBGV data seasonally adjusted by NBF.
Toronto: Drop in home sales sent home prices down Seasonally adjusted monthly home sales and House Price Index monthly change
%m/m
Number of homes sold Average sales from May 2015 to April 2017
4
Average sales from May 2017 to March 2018
3
10,500 10,000 9,500 9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,500
2 1 0 -1 Teranet-National Bank HPI
-2 -3 2015
2016
2017
2018
NBF Economics and Strategy (data from Teranet National Bank House Price Index, CREA and TREB data seasonally adjusted by NBF)
Teranet-National Bank House Price Index Note on methodology: The indexes of the 11 metropolitan markets comprising the Teranet–National Bank Composite House Price Index™ are smoothed. Each month, the (unsmoothed) indexes estimated for each of the last three months are averaged to produce that month’s index. This procedure allows evening-out month-to-month fluctuations. Teranet-National Bank National Composite House Price IndexTM 12-month % change
June 2005 = 100
16
240
14
220
12
200
12-month change (L)
10
Index (R)
180
8 6
160
4
140
2
120
0
100
-2 80
-4
60
-6 -8
40 2000
2002
2004
2006
2008
2010
2012
2014
Toronto
Montreal 12-month % change
June 2005 = 100
18
2016
2018
Victoria
12-month % change
June 2005 = 100
260
32
260
240
28
240
Vancouver
12-month % change
June 2005 = 100
12-month change (L)
14
220
24
200
20
220
12 10
Index (R)
180
16
6
160
12
4
140
2
120
8
0
100 80 60 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
180
12-month change (L)
8
140
4
120 100 80 60
-8
2018
1998
2000
Quebec City
2006
2008
2010
2012
2014
2016
240
20
12-month change (L)
16
200
170
Index (R)
160
130
6
120
4
170 160
Index (R)
10
150 8 6
100 90
0
4
120
0
100 80
-4
2
40
-12
20 2000
2002
2004
2006
2008
2010
2012
2014
2016
16 12
240
80 -2
70
200 180 160 140
4
120
0
100 80
-4
60 -8
40
-12
20 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Edmonton 12-month % change
June 2005 = 100 190
190 50
12-month change (L)
45
180
Index (R)
40
170 160
35
25
90
220
Index (R)
8
2018
June 2005 = 100
12-month % change
130
100
0
70
20
60 -8
30
110
80 -2
260
12month change (L)
140
140
120
4
110 2
160
180
12-month change (L)
12
280
24
Calgary
150 140
180
Index (R)
8
1998
June 2005 = 100
14
300 28
220
12
2018
180
12month change (L)
8
2004
12-month % change
June 2005 = 100
14
10
2002
260
Ottawa–Gatineau
12-month % change 12
160
-4
-4 -6
200
0
-2
280
24
Index (R)
June 2005 = 100
300 28
16
12-month % change
150 140 130
20
120
15
110
10
100
5
90
0
80
-5
70
-10
50
180
45
170
Index (R)
40
160
35
150
30
140
25 20 15
130
12-month change (L)
120 110
10
100
5
90
0
80
-5
70
-10
60
60
-4
-4
60 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
60 1998
2018
2000
2002
2004
Halifax
2006
2008
2010
2012
2014
2016
2004
2006
240 220
22 20
200
18 16
180
June 2005 = 100
26
240 220
22
Index (R)
160
200
18
Index (R)
16
180
140
8 6
120
2014
2016
2018
12
12-month % change
2
100
0
160
80
-4
60 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
140
8 6
120
2
100 80
-2 -4
60 2000
2002
2004
2006
2006
2008
2010
2012
2014
2016
2018
210 200 190
12-month change (L)
14
Index (R)
180 170
12 10
150 140 130
6
120 4
110
2
100 90
0
1998
2004
220
18
8
0
-2
2002
June 2005 = 100
20
4
4
2000
160
12-month change (L)
10
10
2012
16
20
14
12-month change (L)
2010
2018
24
24
2008
Winnipeg
12-month % change
June 2005 = 100
26
12
2002
Hamilton
12-month % change
14
2000
2008
2010
2012
2014
2016
2018
80 -2
70
-4
60 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2
Teranet-National Bank House Price Index Economics and Strategy Montreal Office 514-879-2529
Toronto Office 416-869-8598
Stéfane Marion
Marc Pinsonneault
Kyle Dahms
Chief Economist and Strategist
Senior Economist
Economist
MD, Public Sector Research and Strategy
[email protected]
[email protected]
[email protected]
[email protected]
Paul-André Pinsonnault
Matthieu Arseneau
Jocelyn Paquet
Senior Fixed Income Economist
Senior Economist
Economist
[email protected]
[email protected]
[email protected]
Krishen Rangasamy
Angelo Katsoras
Senior Economist
Geopolitical Analyst
[email protected]
[email protected]
Warren Lovely
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